By Bernie Becker - 03/22/11 03:20 PM EDT
That sort of move has been supported by companies like Apple and Cisco, and also by Sen. Barbara BoxerBarbara BoxerDems gain upper hand on budget Overnight Finance: Senate rejects funding bill as shutdown looms | Labor Dept. to probe Wells Fargo | Fed to ease stress test rules for small banks Funding bill rejected as shutdown nears MORE (D-Calif.), who represents some of the technology companies pushing for a so-called repatriation holiday.
But Treasury Secretary Timothy Geithner has signaled in multiple forums that the administration would only deal with repatriation as part of a broader discussion to overhaul the corporate tax code.
“Repatriation — we would be happy to consider in the context of overall corporate reform,” Geithner told the Senate Finance Committee in February. “If we can do corporate reform right, we'll have a chance to help on that front, but would not support it outside the context of comprehensive reform.”
Cantor also signaled to reporters last month that he favored allowing overseas profits to be returned to the United States at a lower tax rate. His call for a lower corporate tax rate came days after Rep. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, said he wanted to lower both the top corporate and individual rates to 25 percent.
In the middle of the last decade, corporations were allowed to bring profits back to the United States at the reduced rate of 5.25 percent. The current top marginal corporate tax rate is 35 percent.
Proponents of such a plan say it helps spark job creation here, but skeptics have doubted the stimulative effect of the measure.
Rep. Brian Bilbray (R-Calif.) this month introduced a tax holiday measure that would allow funds to be brought back at a 0.0 percent rate if they are used to help a corporation expand or invested in research and development and new manufacturing. It also establishes a 5.25 percent rate if profits are returned to the United States for other reasons.
Sen. Orrin HatchOrrin HatchSenate Dems shun GOP vulnerables Senators already eyeing changes to 9/11 bill after veto override Internet companies dominate tech lobbying MORE (R-Utah), the ranking member of the Senate Finance Committee, has also expressed some skepticism about the idea of a repatriation holiday.
“Probably from an accounting and tax standpoint, that’s not a good way to go,” Hatch said at an event several weeks ago. “But we did it once before, and it could be done under certain circumstances.”